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Thursday, February 26, 2015

Ethiopia plans to revive biodiesel production

Ethiopia is an unlikely setting for a revived “food versus fuel”
debate. As a country once overwhelmed by famine, it may seem odd that
the Ethiopian government would be in favour of anything associated with
food security risk. But the case for biofuels in Ethiopia is strong and
it’s growing stronger.
Like many countries, the Ethiopian government was eager to realise
the potential of jatropha, a biofuel crop with “green gold” credentials,
ten years ago. Opinions soured in 2007 and 2008 when the global food
price crisis struck and biofuel production was identified as one of the
root causes. This, coupled with disappointing jatropha harvests,
prompted a swift exit by Ethiopia’s biodiesel developers.
The government is keen to revive interest in biofuels and is pinning
its hopes on the private sector to finance new projects. It is offering
tax holidays and free land leases for up to seven years to biofuels
developers. According to Nadew Tadelle who runs the recently created
biofuels private enterprise unit at the Ministry of Water and Energy,
the government hopes biodiesel production may reach 450m litres a year
within the next five years, up from virtually zero currently.
A 15,000 litre-per-day biodiesel processing facility was scheduled to
be commissioned in February. It’s the first of several planned
processing units by African Power Initiative (API), with backing from
Saudi Arabia’s Al Romaizan family and Pegasus Capital in the US. It
plans to reach a total processing capacity of 2m litres per day by 2020.
Already, the project covers 1m acres of degraded land, which will be
extended to 4m acres in the future. “We will buy seeds from the people,”
says API’s Marcos Bitew. “This project is bringing together everyone –
capitalists, the Ethiopian government, the development people.” The
company will pay farmers for seeds at a fee determined by the price of
diesel.
Ethiopia is particularly keen to substitute biofuels for imported
diesel. “Every fuel is imported and so currently around 75 per cent of
our export earning goes towards the import of oil,” says Tadelle.
Ethiopia’s fuel bill weighs heavily on its current account and foreign
currency reserves. It currently has reserves to cover only 2.2 months’
worth of imports – almost half the 4.3 months it had in 2010-11.
The Ethiopian government is carrying out demonstration projects in
the hope of attracting international investment. According to Michael
Tesama, head of projects at Ethiopia’s biofuel directorate, 24m jatropha
seeds have been distributed this year and there are already around 100m
jatropha trees in Ethiopia. “We want to show the farmers how they can
collect the product and at some point we will show this to private
investors,” says Tesama.
It is well established that jatropha can grow in Ethiopia, even in
arid areas. It’s been grown for non-biodiesel purposes for many years
and is referred to locally as “ayderkie” and “yedinber shimagilie”,
meaning “drought resistant” and “border mediator”, indicating its use as
a hedge.
However, biofuel crop cultivation is only allowed on “marginal land”,
which tends to be very arid. While jatropha can grow in arid areas,
yield and the oilyness of seeds can be badly affected. Indian biofuel
company Emami Biotech found that while its jatropha trees planted in
Ethiopia’s Oromia region in 2009 survived, they grew very slowly. The
company was allocated 11,000 hectares and planned to invest $83m in
jatropha plantations, but the project was abandoned in 2011.
The UK’s Sun Biofuels had a similar experience in the Benishangul
Gumz region. It was granted 80,000 hectares in 2006 to grow jatropha but
abandoned its plans three years later citing low rainfall and poor soil
quality as the main reasons for bad harvests.
API is confident that biofuel yields will be sufficiently high for
its biodiesel project. “Our yields are very high. Even if we got small
yields per tree, the sheer scale [of the project] will make up the
difference,” says Marcos Bitew. The project’s partners are working with
Yale University Green Chemistry Department on research and development.
The government insists that only marginal land is used for biofuels
cultivation so that it does not compete with agriculture. However, the
definition of “marginal” is far from exact.
“They do not have a stated criteria for what is marginal land,” says
Brigitte Portner from the Centre for Development and Environment at the
University of Bern. “Marginal land in their sense is just land that is
not being used agriculturally but in most cases it is used – it’s just
that it’s being used by pastoralists to graze cattle or the local people
use it to collect firewood. It’s just that it’s not intensive
agriculture there.”
It’s also difficult to enforce rules on where biofuels can be
cultivated. Food crops tend to take precedence over biofuels as they
command a higher price, but research by the Environment for Development
initiative found that cash crop production can be negatively affected by
biofuel crops as growers allocate up to a third of their land to
biofuels.
This can wipe out the trade balance benefits of biofuels as cash
crops are targeted at the export market. The researchers found that
“although both exports and imports show a decreasing trend following
biofuel expansion, the decline in exports is greater than imports,
indicating worsening of the trade balance”.
This may pose a national policy dilemma, but for individual farmers
biofuels may help food security. Research has found that calorie intake
is higher in households that also produce castor beans, a biodiesel
crop. These households also experience 25 per cent shorter periods of
food shortage between harvests, as biofuels can be grown when food crops
cannot. At a micro level at least, biofuel crop cultivation may be a
complement, rather than competitor to food in Ethiopia.
http://blogs.ft.com